An estimated 21,000 jobs were lost at the Coast last year, while tourism sector earnings may have fallen by as much as 85 per cent, according to companies in the industry.
The sector’s misfortunes worsened after the September 2013 terrorist attack on the Westgate Shopping Mall, tour operators say, after which insecurity has continued unabated.
The decline in number of foreign tourists, traditionally a key source for foreign currency inflows, has sent ripples to other sectors in a contagion that “is beginning to be painful”.
Adam Jillo, a tour operator and Kenya Private Sector Alliance board member in charge of security and tourism, said sectors already feeling the contagion include air transport, agriculture and food distribution, auto industry, credit and construction.
“Zanzibar has today take away up to 90 per cent of what was the Kenyan Coast tourism market until three years ago,” Jillo said at a Kepsa briefing on Wednesday, without citing absolute numbers.
“Many hotels have been forced to close down and others will be closing down soon.”
Kenya earned $2 billion – Sh183.34 billion at the current exchange rate – in 2012 international tourism receipts, World Bank data show, but this has been on decline over the past two years owing to persistent insecurity.
Latest foreign visitors arrival data is expected this Friday from the government statistician, but seven-month numbers already showed a decline of 16.9 per cent to 514,889, from 619,472 foreign tourists in 2013.
Kenya Tourism Board figures show a total of 1.1 million visitors flew into the country in 2013 compared to 1.23 million in 2012, a 10.4 per cent decline.
Impact of the ailing tourism sector caught up with lenders in 2014 third quarter as borrowing slowed, according to Central Bank’s credit report.
Out of 11 cluster sectors, the hospitality industry was the only one that did not record growth in loans and advances in the three months to September 30 despite the country’s relative calm over the period.
The total loans and advances to the hospitality industry amounted to Sh33.9 billion at the end of September compared to Sh41.5 billion in June. The 18.3 per cent decline indicated that the sector was merely repaying old loans and not taking new credit.
“Tour operators are in the same situation as the hoteliers; there are no safari jobs and they have vehicles to maintain and loans owed to banks,” said Jillo, who is also the Kenya Tour Operators Association chairman.
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